Innovation from the Most Pedestrian Corner of Life

There’s no question deposit accounts are having a moment. In a rising rate environment, banks earn an increasing yield on the deposits they hold, and these additional proceeds can often go directly to earnings. To gather more deposits, banks fight to get consumers to switch banks, but it’s a tough sell because changing banks is painful.

While lots of institutions are offering deals to entice people to move their accounts, they haven’t invested in making the consumer experience as good as it should be. People have been using and managing money online at scale for 20 years, and we’ve now gotten to a place where people are not just comfortable with handling money online, but they expect it. The traditional financial institutions have improved on some marks, like improving their mobile experiences (or at least creating one at all), but there’s still a lot of space to tackle.

At SoFi, we’ve done our research and we’ve found people are frustrated with three central parts of their banking experience: 1. They hate fees. Who wants to pay $12 to maintain a checking account? 2. The technology is lame. It certainly doesn’t live up to other online experiences, like Amazon or Instagram. Why should you have a separate log-in at the same bank to manage your checking account and your mortgage? 3. Banks make (way) more off people’s money than they do. Why are we left to accept an average 0.05% APY1 on a checking account in a rising rate environment?

And that’s why today, we invited the first members off the waitlist for SoFi Money: a simple, seamless and integrated new way to bank. At SoFi, we think we’re creating something that isn’t just different, it’s better. The mobile-first user experience offers a blended checking and savings account with better integrated technology for all of your banking needs, better rates (1.10% APY2 in June), plus SoFi membership benefits, including complimentary access to career counselors, certified financial planners3, and exclusive events.

And research shows people-yes, of every generation-want to bank digitally, but some matters require that human touch. A recent study by Celent showed that over half of individuals between 18 and 44 years old choose to bank digitally, but want some kind of human interaction for complex issues. That’s why we’re building a hybrid model that meets our members where they are—if they want to do everything online, they can. If they want to talk through financial planning or a topical finance question with one of the planners on staff at SoFi Wealth, LLC, they can easily reach someone, too.

Looking to the future, we can expect this space to continue to get more crowded and the non-traditional provider’s market share to grow. The internet helps consumers better understand their choices and hear about new, better offerings, which we think will drive growth in these new offerings that have better value propositions.

Traditional banks will still command the dominant position–no one’s under any illusion that we’re going to see the majority of deposits shift away from them in the next few years. But, there will be increased pressure for traditional financial institutions to try and adapt to what we and others are doing. The speed and effectiveness of this adaptation is an open question over the long term, but companies like SoFi will work hard to never stop innovating.

It’s not about forcing the consumer to do what we want them to do-it’s about designing a product that allows them the flexibility to use the product as they choose. And we’ll be here iterating on an integrated product that continues to serve those needs and making sure that we’re fulfilling our mission of helping our members achieve financial independence by realizing their ambitions.

SoFi Money is offered through SoFi Securities, LLC Member FINRA/SIPC. SoFi or its affiliates are not a bank. 1. https://www.valuepenguin.com/banking/average-checking-account-interest-rates 2. The Annual Percentage Yield (APY) for SoFi Money accounts, effective as of 6/1/18, is 1.10% for all balances in all states. Interest rates are variable and subject to change. 3. Advisory services offered through SoFi Wealth, LLC, a SEC Registered Investment Advisor.

ABOUT SoFiSoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than half a million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

✝ To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.